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TMI Blog2014 (6) TMI 193X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rs.25 lakhs on the respondent- exporter under Section 114 of the Act. 3. This Court while admitting the appeal on 20.01.2012, formulated the following substantial questions of law: "(i) Whether the conclusions of the CESTAT that the order in original travelled beyond the scope of the show cause notice since the original authority relied on some fresh materials which were not cited in the show cause notice and the two reports of chemical laboratory cited therein were not relied upon because of certain defects, is legally tenable? (ii) Whether the conclusions of the CESTAT that the Commissioner has travelled beyond the scope of the show cause notice, while passing the order in original, is legally tenable?" 4. The respondent-exporter had presented a consignment (Iron ore) for export, declaring its Fe contents as 65% in Shipping bill dated 14.05.2004. The quantity of the export goods (Iron Ore) was 39650 MTs and the Free on Board (FOB) value declared was over to Rs.5.75 Crores. Admittedly, the respondent-exporter was possessing Export licence of Iron O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Further, it appears that the exporter had misdeclared the export goods in the shipping bill and the connected export documents and thereby the goods are also rendered liable for confiscation under Section 113(i) of the Customs Act. 6. By their act of exporting the goods by misdeclaring the Fe content in the Iron Ore in violation of license issued by DGFT and Policy provisions, rendering the goods liable to confiscation under Section 113(d) and 113(i) of the Customs Act, 1962, the exporter, M/s.Laxminarayana Mining Company, /Sannidhi Road, Basavanagudi, Bangalore- 560 004 (appear liable for penalty under Section 114(i) of the Customs Act, 1962). 7. Now, therefore M/s.Laxminarayana Mining Company, Sannidhi Road, Basavanagudi, Bangalore-560 004, are hereby called upon to show cause to the Commissioner of Customs, New Custom House, Panambur, Mangalore-575 010, as to why (i) the 39650 Metric Tons (Net Qty.) of iron ore fines, valued at Rs. 57506378/- (FOB) and exported vide shipping B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mmissioner. Secondly, it was held that the material, on which the Commissioner relied upon was not mentioned or referred to, in the show cause notice under Section 124 of the Act. 9. Mr. C. Shashikanth, learned counsel appearing for the appellant, at the outset, invited our attention to the order passed by the Commissioner and after taking us through the same, submitted that the Commissioner after relying upon the material extracted from the respondent-exporter, in the course of hearing/enquiry, recorded the finding that the Fe content of the Iron Ore samples was more than 65%. He placed reliance upon the report of the chemical examiner at China, which show that the Fe content of Iron Ore was 65.27% as per CIQ reports dated 28.06.2004 and 07.07.2004. On the basis of these reports and the other documents which came on record, in the course of hearing, before the Commissioner, learned counsel for the appellant submitted that the Commissioner has rightly drawn the inference that the Fe content of Iron Ore was more than 65%. He also submitted that it was not necessary for the Commissioner, while issuing show cause notice, to disclose all the materials they wanted to rely upon. He subm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Before taking any action of confiscation of goods or imposition of penalty under the provisions of the Act, it is necessary to issue show cause notice under Section 124 of the Act. Under this provision, no order confiscating any goods or imposing any penalty on any person shall be made unless the owner of goods or such person is given a notice in writing with the prior approval of the officer of the Customs not below the rank of Assistant Commissioner of Customs, informing him "of the grounds", on which, it is proposed to confiscate the goods or to impose the penalty; and is given an opportunity of making representations in writing within such reasonable time as may be specified in the notice against the grounds of confiscation or imposition of penalty mentioned therein. Section 124 also provides for an opportunity of being heard, provided, such request is made by the person concerned either in writing or oral. 14. Having regard to the provisions of the Act referred to above, it is clear that in the show cause notice under Section 124 of the Act, it is mandatory to inform, any person, of the grounds, on which the authority proposes to confiscate his goods or impose penalty on hi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l analysis, what was the method adopted by the laboratory in China or what were the standards prescribed for collecting the samples and conducting chemical analysis there. The report of the chemical laboratory at China which has shown 0.27% more Fe content than what is prescribed. Admittedly, the show cause notice did not make any reference, direct or indirect to these reports. Therefore, in our opinion, the reports of laboratories in China are of no avail to the appellant to take their case any further. Even the other material which was relied upon by the Commissioner, was not disclosed/reflected in the show cause notice and in any case that would not help the appellants to contend that there was an admission on the part of the respondent-exporter that the Fe content of Iron Ore exported by them was more than 65%. As a matter of fact, respondent-exporter, right from inception has contended that the Fe content of Iron Ore exported by them was not more than 65%.
17. It is in this backdrop, we do not find any merit in the appeal and hence, it is dismissed. Both the questions are accordingly answered against the appellant and in favour of the respondent. No costs. X X X X Extracts X X X X X X X X Extracts X X X X
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